Bhadra
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If this is the line of thinking then why not provide a direct and easy access through Siliguri corridor which can connect India. bangladesh, Bhutan and Nepal. Kunming is still far off and old stillwell road is no good.The best way for China to "contain" India is better access to India, not encirclement. India-China bilateral trade dwarfs China-Pakistan and the long-term economic impact of CPEC by an order of magnitude. This trade will only get better for China with projects such as SWSR.
The current status-quo is China's worst bet, as it is geared toward pushing India further away from China, into the western sphere of influence, and CPEC being a blackhole for Chinese money. They neither achieve containment of India, nor the kind of trade they want.
For India, SWSR is a ticket to easily taking back PoK, and building energy linkages with Central Asia. The cost of giving China land access through India is outweighed by the benefits of India's physical access to Central Asia (and Russia). It will give India its first real energy source other than the Middle East.
If China bites, this will be the first real opportunity for China to kick the west out of Asia.
Any direct access to China would be historical blunder of gigantic proportion much greater than Nehru heaped on India in a Socialist Garb by supporting Chinese annexation of Tibet. China responded by breaking history of Chinese ever being a threat to India.
Is not the CPEC itself sufficient enough to pose a grave threat to India that you want another one ??